Phillips 66 approves key Texas NGL projects

Phillips 66 has received approval from its board of directors to move forward with both its Sweeny Fractionator One project and its Freeport liquefied petroleum gas (LPG) export terminal. 

These two projects, both located along the upper Texas Gulf Coast, represent an investment of more than $3 billion as part of the company’s midstream growth program.

“It’s an extraordinary time of opportunity for our company and our industry, especially in the rapidly growing midstream space,” said Tim Taylor, executive vice president of commercial, marketing, transportation and business development at Phillips 66. 

“Given the anticipated growth in natural gas liquids production, we see substantial advantages in having fractionation and export facilities on the Gulf Coast outside of Mont Belvieu," he added. "These projects allow us to maximize our existing infrastructure and will position us for further growth.”

The Sweeny Fractionator One will be located in Old Ocean, Texas, close to the company’s Sweeny refinery, and will supply purity natural gas liquids (NGL) products to the petrochemical industry and heating markets. Y-grade (mixed NGL) supply to the fractionator will come from nearby major pipelines, including the recently completed Sand Hills Pipeline, in which Phillips 66 owns a direct one-third interest. 

The 100,000 bpd NGL fractionator is expected to start up in the third quarter of 2015.

Meanwhile, the Freeport LPG export terminal will be located at the site of the company’s existing marine terminal in Freeport, Texas, and will leverage Phillips 66 midstream, transportation and storage infrastructure to supply petrochemical, heating and transportation markets globally. 

The terminal will have an initial export capacity of 4.4 million bbl/month, the equivalent of eight very large gas carriers (VLGCs), with a ship loading rate of 36,000 bbl/hour. Startup of the export terminal is expected in mid-2016.

Each of these projects will include NGL storage and additional pipelines with connectivity to market hubs in Mont Belvieu, Texas. Also included with these projects is a 100,000 bpd de-ethanizer unit that will be installed close to the Sweeny refinery to upgrade domestic propane for export.

The two projects are in varying stages of development. For the Sweeny Fractionator One, site preparation is progressing, critical equipment has been ordered, and expansion of supporting infrastructure has begun, according to Phillips 66 officials. 

For the Freeport LPG terminal, the company says it continues to work with the appropriate agencies to secure necessary permits, and its construction will commence once all permits are approved. Together, the projects are expected to create more than 50 full-time jobs and over 1,000 temporary construction jobs.